Korea's industrial output drops further in Nov.

South Korea's industrial production fell at a faster clip in November on sagging exports and sluggish activity in the chip industry, a government report showed Wednesday, deepening concerns over the country's economic growth.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries slipped 2.1 percent last month from a month earlier, further declining from a 1.3 percent on-month drop in October.

Compared with a year earlier, industrial production edged down 0.3 percent.

Output of chipmakers and communications equipment manufacturers fell 9.7 percent and 20.2 percent on-month, respectively, while the manufacturing sector dropped 0.7 percent.

The machinery sector's output increased 2.9 percent in November, while beverage production climbed 7 percent on-month.

"The country's lackluster exports weighed heavily on industrial output," said Choi Jung-su, director of the short-term industrial statistics division. "In particular, the information technology sectors, such as semiconductors and communications equipment, went on inventory adjustment. As a result, their production decreased."

Outbound shipments by Asia's fourth-largest economy came to US$44.43 billion last month, down 4.7 percent from the same month last year, extending their losing streak to 11 consecutive months.

The statistical agency said the lackluster exports also dragged down the average operating rate of the manufacturing industry to

72.7 percent last month, marking the lowest level since April 2009, when it hit 72.4 percent in the aftermath of the global financial crisis.

The manufacturing sector is expected to suffer from faltering demand next year as the prospect for shipments remains negative, said the agency.

Production in the service sector, a key part of the economy, managed to rise 0.1 percent from the previous month and moved up 3.1 percent from a year earlier, the report showed.

The finance sector gained 3.2 percent and social welfare area grew 2.1 percent, while the wholesale and education sectors contracted 1.5 percent and 1.4 percent, respectively.

Private consumption retreated 1.1 percent from a month ago, backtracking from a 3.2 percent on-month jump in October.

"Last month's consumption figure was very good, helped by the government-led promotions," said Choi. "But its on-year gain is quite favorable as it rose 5.5 percent from a year earlier."

For all industries, which include the service and construction sectors, output inched down 0.5 percent from the previous month but rose 2 percent from a year earlier.

The Ministry of Strategy and Finance said domestic consumption will likely continue to do well, but global uncertainties including a slowdown in China and a U.S. rate hike are expected to bear down on overall production and investment.

The ministry has said it will frontload 68 percent of next year's budget in the first half to help prop up economic growth and cushion fallout from the faltering exports. The Seoul government earmarked a total of 330.6 trillion won ($281 billion) for next year.

"We will do our best to fuel the economic growth that has shown signs of recovery," said the ministry. "And we will strengthen monitoring of the financial and foreign exchange markets in the face of rising uncertainties." (Yonhap)